P222: RESOURCE USE AND DEVELOPMENT
MODULE 2
MEASURING
SUSTAINABLE DEVELOPMENT
The short presentation aims to provide you an overview of developed measures to
assess sustainable development.
Read each slide and click on suggested readings with the icon
Jot down notes and take your time to answer guide questions.
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On the upper right of the slide. Contents
Module 2: Measuring Sustainable
Development
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Contents
Genuine Green
Savings GDP
Ecological Other
Footprint measures
Module 2: Measuring Sustainable
Development
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Genuine Savings
Contents
Measures the change in value of a specified set of assets
whether there is investment or disinvestment in different types
of capital
Developed by Hamilton and Clemens (1999) wherein the social
well-being of a nation is equal to “net depletion of natural
capital and the cost of atmospheric pollution as well as
accumulation of human capital” (Soysa et al as cited by Boos)
Sometimes referred to Adjusted Net Savings by the World Bank
Click the boxes for definitions and further reading resources
OECD Hamilton (2000)
World Bank Boos (2015)
Genuine Article on
Adjusted Net Article on
Savings Genuine
Savings indicator Genuine Savings
Definition Savings
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Genuine Savings
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Genuine savings = Gross domestic savings
- Consumption of fixed
capital
+ Education expenditure
- Air pollution costs
- Water pollution costs
- Carbon dioxide damage costs
- Nonrenewable natural
resource
depletion costs
Module 2: Measuring Sustainable
Development
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Genuine Savings
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Gross domestic savings is the basis of the index, it is computed
by subtracting final consumption expenditure from GDP.
Consumption of fixed capitals accounts for replacement value
of produced capital in the production process.
Education expenditure refers to the added value of
investments in human capital by educational institutions.
Air and water pollution costs are those that represents the
costs of environmental degradation. Carbon dioxide damage
costs are also environmental damage costs but long-term.
Non-renewable natural resource depletion costs refer to the
declining costs of natural capital due to extraction or harvest.
Module 2: Measuring Sustainable
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Green GDP
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Under the green macroeconomic indicators or “eco-
domestic product”
Known as environmentally adjusted GDP (OECD)
0ffers a way to include the natural capital in the GDP by
subtracting (1) resources to be invested to compensate
future generations for dissipated nonrenewable
resources; (2) resources spent for remediating pollution;
and (3) estimated harms from pollution.
Module 2: Measuring Sustainable
Development
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Green GDP
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Green GDP
= Gross domestic product
- Consumption of natural resources
- Environmental degradation costs
- Environmental protection expenditures
Consumption of natural resources also refers to the decrease of natural
resources
Environmental degradation costs are those that negate environmental
harms due to economic activities
Environmental protection expenditures refers to the amount used to
improve the state of a particular natural capital
Module 2: Measuring Sustainable
Development
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Green GDP
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China and Norway are among those countries that had institutionally
developed means to express natural resources into physical units.
These was documented in the
“International Experiences with Green GDP”.
Click the boxes below for Malaysian and Philippine experiences in adjusting GDP to
value environmental assets.
Ponder:
What challenges do developing
nations face in establishing an
alternative economic growth
indicator?
Green GDP and GDP, Malaysia, 1987-2011
Vaghefi, N., Siwar, C., Aziz, S
Green GDP and Sustainable Green GDP Towards Sustainable
Development in Malaysia Development: The Philippine Experience
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Ecological Footprint
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• Measures human appropriation of ecosystem products
and services in terms of the bioproductive land and sea
area needed to supply these services
• Total area necessary to indefinitely sustain a given
population at the current standard of living and at an
average per capita consumption rate (Rees 1992,
Wackernagel and Rees, 1994)
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Ecological Footprint
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• Measure the amount of the earth’s biological productivity that a
human population - global population, a country, a city or an
individual - occupies in a given year using prevailing technology
no matter where the land is located
• The unit of measure used is biologically productive area or global
hectare.
• Includes six bioproductive areas, with corresponding equivalence
and yield factor, such as (1) crop land, (2) grazing land, (3) forest
area, (4) fishing ground, (5) built up areas, and (6) land for
sequestering excess carbon dioxide
Module 2: Measuring Sustainable
Development
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Ecological Footprint
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Wackernagel et al (2002) estimates
the ecological footprint and
bioproductivity of over 140 countries.
Figure on the left show’s that the
Earth’s ecological footprint already
had exceeded its capacity. Is the
Philippines exceeding its capacity?
See Table 9 of the resource box below
to check which countries has
ecological deficit.
Ecological Footprint of Nations,
Wackernagel, M., Monfreda, C. and Deumling, D.
rprogress.org 2002 Update
Module 2: Measuring Sustainable
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Other Measures
Contents
Environmental Wellbeing Index measures
Sustainability Index health, population, wealth,
measures overall progress education, peace, freedom,
towards environmental biodiversity, water quality, air
stability (World Economic and energy among others
Forum, 2002) (Prescott-Allen, 2001)
Direct Material
Living Planet Index assesses
Consumption sums domestic
overall state of natural
extraction flows (extracted
ecosystems including human
raw materials, biomass,
pressures and pollution effects
manufactured products, etc.)
(World Wildlife Fund)
(Eurostat, 2011)
